Commission Watch

FERC faces a growing chorus of rebellion on earnings incentives.

"If I may say, today, we the states are the chosen ones." That was Virginia utility commissioner Hullihen ("Hulli") W. Moore, speaking on the phone in January with Federal Energy Regulatory Commission (FERC) Chairman Pat Wood and other federal and state regulators, trying to untangle the business of transmission reform.

Moore's comment proved prophetic. Within two months, the state public utility commissions (PUCs) representing Pennsylvania, Michigan, and Ohio took the extraordinary step of asking FERC to overrule any state that would block FERC's plan, in a motion filed in March.

The problem was none other than Hulli Moore's Virginia. In February, the Virginia General Assembly had enacted House Bill 2453, a law prohibiting any Virginia utility from transferring ownership of its transmission system, and the state's governor had shown no inclination to cast a veto. American Electric Power, with a subsidiary operating in Virginia, had cited the new law as reason to go slow on joining PJM-or any regional transmission organization (RTO), as it had promised as a condition of its merger with Central & South West.